Government jobs are decreasing in India at an unprecedented pace, and several factors contribute to its decline. A decade-long Public Enterprises Survey report (2012 – 2022) reveals a sharp decline in available government jobs. The report based on PSUs and other subsidiaries revealed a drop in employment numbers from 17.3 lakh in early 2013 to 14.6 lakh around the same period in 2022.
Continuous reduction in govt jobs is becoming a national issue, with opposition politicians accusing the current administration of limiting labour numbers. One report citing an opposition politician claims over 1 crore jobs are sitting idle throughout India’s govt labour structure. However, reductions in hires continue to rise which signal a reduction in total employment across govt sectors. Let’s explore eight (8) reasons why government jobs are decreasing in India.
Rising Labour Expenditure
India’s spending on salaries and pensions have increased in recent years, stifling further spending on job creation. The country’s GDP percentage spent on pensions and worker salaries rose from 4.5% in 2011/12 to 6% in 2019/20, limiting more spending on new jobs.
The rising labour expenses coupled with a fiscal deficit in 2021 is another reason why government jobs keep decreasing in India. A GDP fiscal deficit of 9.5% in 2021 triggered several austerity measures which included reduction in average hires across several govt departments.
Rising costs to service labour in India directly affects how many govt jobs are available each year. Stringent financial measures aiming to improve efficiency and reduce costs will likely favour casual labour if such expenditure keeps rising.
Structural Changes in Govt Institutions
Some government institutions have executed mergers in the past which led to a reduction in available central or state-level jobs. An example is the public sector bank consolidation from 2017. Banks operating in the public sector executed mergers to drop their total count by over 50% in 2020. These mergers aimed to promote redundancy while limiting the need for more staff across India’s public banking sector.
However, such a move directly affects how many govt jobs are available in India. Public sector banks used to be one of the highest employers of labour within India’s government structure. The mergers and job cuts now promote a leaner staff strength across existing public sector banks.
Department mergers of this kind has been a govt policy drive since the late 2010s but it continues to receive constant backlash.
Decline in Govt Department Jobs
A recent news report suggests that up to 50,000 employees are set to lose their jobs in central government departments. The report is based on a projected reduction in the number of central railway jobs added before early 2025. Interim Budget data expects a staff peak in 2024 but a likely drop of at least 50,000 jobs the next year.
Rise in Casual Labour Options
A report by India’s Labour Bureau reveals a sharp rise in contractual employment within the country. Data from the report revealed that central govt contractual employment increased to 11.3% in 2018 from a low 2.9% in 2011. State-level govt jobs has also seen an increase in contract-based employment. States like Bihar and Uttar Pradesh favour contract hires wherever possible and now have up to one-fifth of their entire staff on temporary employment.
Rising casual labour options continue to appeal to more govt departments. Such contract-based roles give states and central departments enough freedom to hire staff for specific tasks. However, the rise in casual employment can dent the chances of applicants seeking full-time govt jobs.
Rising Unemployment Numbers
Government jobs continue to shrink while demand for such vacancies keep skyrocketing. An Economic Times report says that central and state-level government jobs were able to recruit 0.3% of entire applicants in 2022. Another shocking statistic from the report showed that India’s government hired 7.22 lakh candidates from a pool of 22 crore applicants from 2014 to 2022.
These numbers suggest a rapid decline in the number of jobs available to candidates within India’s government. Rising unemployment means fewer jobs are available for crores of fresh and returning applicants each year.
COVID-19
India was one of the hardest-hit countries during the COVID-19 pandemic. Several reports suggest that India’s GDP contraction by 7.7% in 2020/21 was a result of the pandemic. Different austerity measures implemented right after the global health emergency targeted an economic rebound. However, some of these measures, like hiring freezes, reduced the number of govt jobs available across sectors.
Privatization
India’s government continues to target privatization of certain public sector units (PSUs) which contribute to reduction in govt jobs directly. Disinvestments aimed at privatizing PSUs could see up to ₹ 2 lakh crore cuts in PSU spending. These cuts will directly affect labour costs and reduce the required number of govt workers required to perform certain roles.
Automation
Technological advancements are likely to decrease government jobs in India by 2030 according to a study by the McKinsey Global Institute. Increased automation within the government will reduce dependency on crores of staff for basic administrative and clerical duties.
The McKinsey report claims that total job displacement due to automation in India can cut up to 7.3 crore jobs in the next half-decade.
Evidence of automation and how it can reduce dependency on more staff is already evident at state level. State governments of Andhra Pradesh and Maharashtra are already on a digital drive to convert existing records into electronic format. Such a drive can be vital to reduce the entire clerical and administrative workforce of states over time. However, this effort will reduce available jobs within India’s government structure.
Conclusion
A combination of factors directly contributes to the reduction of jobs in India’s government structure. Rising labour costs, redundancies, abolished positions, and other elements continue to shrink the country’s aggregate public sector employees. Addressing these job reductions will be crucial to the govt’s approach to combat unemployment in India.
Growing application numbers for fewer available govt job vacancies is becoming commonplace in India. There should be a concerted effort to limit waste in appointments while catering to the employment needs of the country’s labour-age population.
Reference Links:
https://economictimes.indiatimes.com/jobs/indians-desperation-for-government-jobs-in-the-last-eight-years-shows-unemployment-crisis/articleshow/93197972.cms
https://www.rediff.com/news/report/central-govt-jobs-to-shrink-by-50k/20240212.htm
https://psuwatch.com/newsupdates/central-psu-jobs-decline-by-over-27-lakhs-in-past-decade-govt-data